Pidilite Industries sees an early pickup in its export-linked businesses from the India–US trade deal, with management expecting the recent tariff rationalisation to reverse the slowdown seen in the December quarter, even as the proposed India–EU free trade agreement remains a medium-term opportunity.

Pidilite delivered double-digit growth in the December quarter, despite export headwinds. On a consolidated basis, net sales rose 10.2% year-on-year to ₹3,699 crore in Q3 FY26, while profit after tax grew 12% to ₹624 crore. EBITDA increased 12% to ₹894 crore, with margins improving to 24.2%, aided by lower input costs.

On a standalone basis, net sales grew 11% to ₹3,425 crore, supported by underlying volume growth of 9.3%. The consumer and bazaar segment continued to anchor performance, with revenue rising 12.4% and volumes up 9.7%. In contrast, the B2B segment posted a modest 2.9% revenue growth, partly hit by lower exports of industrial products, including pigments.

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In response to Fortune India's query, managing director Sudhanshu Vats said the India–US trade deal would have a “immediate direct impact on a part of our portfolio”, particularly exports to the US, even though these form a small portion of Pidilite’s overall business. “That had slowed down quite a lot, in fact it declined in quarter three and I think that will bounce back very quickly, towards the end of this quarter and hopefully moving forward,” he said.

Vats added that Pidilite’s B2B segment, which supplies to other export-oriented industries such as leather chemicals, footwear and other industrial categories, should also see an indirect benefit. “These categories will basically get an indirect impetus of the India–US tariff revision,” he noted.

He said the export slowdown in the last quarter was a “blip” rather than a structural issue. “We are confident of our relationship. I think this will correct as the tariff is rationalised,” he said.

Also read: Indo-US trade deal to boost investment, exports across key sectors: Piyush Goyal

On the India–EU FTA, Vats struck a more measured tone, calling it a “very welcome and positive deal” but flagging the time lag before benefits flow through. “By the time the European Parliament ratifies it, it’s about six to nine months away. Towards the end of the year we’ll start seeing some impact,” he said.

Like many companies, Pidilite is “scouting around” and ithe agreement could help strengthen and geographically diversify Pidilite’s export portfolio over the medium term.

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GST rate cuts and demand trends

On domestic demand, Vats pointed to the early effects of GST rate cuts and income tax changes on consumption, particularly in urban markets. While rural growth has outpaced urban growth for four to five years now, he said the gap is now narrowing. Urban growths are inching up to rural growths, for Pidilite, in the last couple of quarters. Vats said that it's a combination of GST 2.0 and the income tax revision which happened in the last budget.

However, he cautioned that the full impact of GST changes would take time to play out. “It might be a quarter, maybe a couple of quarters and a year for it to fully fructify,” Vats said, adding that a 5% GST rate on most household items was “a right long-term move” for India, barring a few exceptions which he hopes will be corrected soon.

Looking ahead, Pidilite reiterated its guidance of double-digit underlying volume growth in Q4 and into FY27, with Vats saying the company aims to keep improving growth momentum while navigating global uncertainties and benign raw material trends.